Medicare A, B, Cs (and D): It’s Easy as 1, 2, 3 (and 4)

Medicare is a federal health insurance program for older Americans to cover expenses associated with hospital stays, prescriptions, and doctor visits.

Medicare is a federal health insurance program that was signed into law in the summer of 1965 by President Lyndon B. Johnson to help Americans 65 and older pay for their medical expenses. Since its inception, Medicare has expanded to include more services and cover more people. Medicare has four parts, each of which provides a different type of coverage.

Medicare Part A

Medicare Part A is hospital insurance that covers inpatient hospital and skilled nursing facility stays, hospice care, and in-home healthcare. The premium for this has mostly been paid through payroll tax deductions while an individual was working.

Medicare Part B

Medicare Part B is medical insurance for doctor visits (including preventive services), medical supplies, and outpatient care. Part B does require a monthly contribution, usually in the form of a deduction to social security payments.

Parts A and B together are often referred to as Traditional or Original Medicare.

Medicare Part C

Medicare Part C is also known as a Medicare Advantage Plan. It is an alternative insurance plan offered by a private insurance company that provides Medicare Parts A and B (and usually prescription drug coverage) under one policy.

Medicare Part D

Medicare Part D is prescription drug coverage and was added as a Medicare option in 2003 under the George W. Bush administration. Part D covers prescription drugs for those who do not elect to purchase a Medicare Advantage Plan (Part C). Part D is a stand-alone plan that is available through private insurance companies, and the federal government subsidizes the premium.

Holes in Medicare Coverage

Medicare does not cover everything that an individual might need. For example, routine dental and vision care are not covered by Traditional Medicare. If you travel a lot or have two seasonal residences, you may need different or additional coverage to Medicare, like Medigap, to help cover out-of-network expenses or expand covered services.